Tippett and Tippett

[2017] FamCA 198

FAMILY COURT OF AUSTRALIA

TIPPETT & TIPPETT [2017] FamCA 198

FAMILY LAW – PROPERTY - Settlement in relation to marriage – Where the husband and wife were married for approximately 20 years and have two adult children – Where contributions are found to be 52.5 per cent by the husband and 47.5 per cent by the wife – Where the imbalance in contributions is as a result of the husband’s initial financial contribution – Where an adjustment of 2.5 per cent in favour of the wife is appropriate – Where it is appropriate that the overall property division is in equal proportions – Where a superannuation splitting order is made – Where orders are made to effect an equal division of property and superannuation interests.

Family Law Act 1975 (Cth) ss 75(2), 79, 90MT(1)(b)

Cerini & Cerini [1998] FamCA 143
Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143
Pierce and Pierce (1999) FLC 92-844
Stanford v Stanford (2012) 247 CLR 108

APPLICANT: Ms Tippett

RESPONDENT: Mr Tippett

FILE NUMBER: SYC 4778 of 2014

DATE DELIVERED: 4 April 2017

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Loughnan J

HEARING DATE: 8 and 9 March 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT:	Mr Hodgson
SOLICITOR FOR THE APPLICANT:	Manning Lawyers

COUNSEL FOR THE RESPONDENT: Mr Richardson SC

SOLICITOR FOR THE RESPONDENT: Barkus Doolan

Orders

Property Settlement Adjustment

1. Within two months of the date of these Orders (or such further time as the parties may agree in writing) the husband shall do all acts and things to pay to the wife the sum of $822,077.50.

2. In the event the husband does not comply with Order 1 above, within seven days of the husband’s non-compliance, the husband and wife shall do all acts and things to sell the property situated at B Street, Suburb C in the State of New South Wales, Folio Identifier … (“the Suburb C property”) in accordance with the following paragraphs:

   2.1.That the husband and wife jointly nominate a real estate agent to act on the sale of the Suburb C property, failing agreement within the seven days, the said agent is to be nominated by the husband and the real estate agent be appointed as the sole agent to act on behalf of the parties for the sale of the Suburb C property and it be listed for sale at a listing price as recommended by the real estate agent for auction. All instructions shall be in writing and no verbal instructions shall be accepted by the real estate agent from the parties and/or any third parties.

   2.2.That the husband and wife each shall co-operate in every way with the agent including (without limiting generally the foregoing):

   2.2.1.Making the key/s available to the agent;

   2.2.2.Allowing inspection of the Suburb C property at all reasonable times as requested by the agent;

   2.2.3.Ensuring the Suburb C property including the grounds are in a neat and clean condition at the time of inspection by the agent and prospective purchasers;

   2.2.4.Signing all documents as requested by the agent in relation to the listing of the sale of the Suburb C property except a Contract or Agreement of Sale which has not been authorised by the parties’ solicitors.

   2.3.That within seven days of days of the husband’s non-compliance with Order 1, the husband and wife jointly appoint a solicitor/conveyancer to act on the sale of the Suburb C property, failing agreement within the seven days, the said solicitor/conveyancer is to be nominated by the wife and the husband and wife shall give joint instructions to the solicitor/conveyancer for the preparation of the Contract of Sale. All instructions shall be in writing and no verbal instructions shall be accepted by the solicitor/conveyancer from the parties and/or any third parties.

   2.4That the husband and wife shall execute the Contract for Sale in the form prepared by the solicitor/conveyancer.

   2.4.That in the event the Suburb C property is not sold by auction or by private treaty within a period of 12 weeks from the date of listing, then:

   2.4.1.The parties shall relist the Suburb C property for sale by public auction with the agent;

   2.4.2.The reserve price for the purpose of the auction shall be as recommended by the real estate agent.

   2.4.3.In the event that the bidding at the auction does not reach the reserve price, the parties may negotiate with the highest bidder and any other interested person and must effect the sale of the Suburb C property at a price which is not more than 2.5 per cent below the reserve price.

   2.4.4.If the Suburb C property remains unsold, the parties shall do all acts and things and sign all documents necessary to immediately re-list the Suburb C property for sale by auction again on a date nominated by the agent.

   2.4.5.The reserve price for the auction referred to in 2.4.4 above is to be agreed by the parties, failing agreement the parties shall appoint the President of the Property Institute of New South Wales or his/her nominee to determine the reserve price of the Suburb C property and the parties shall be bound by the determination. The parties shall share equally the cost of any such valuation and shall be paid from the proceeds of sale of the Suburb C property.

   2.5.That upon completion of the sale of the Suburb C property pursuant to these Orders or otherwise, the parties agree to do all acts and things necessary to cause the proceeds of the sale to be paid and distributed in the following manner and priority:

   2.5.1.In payment of fees due for the nomination of real estate agent, real estate agent’s commission and legal costs and disbursements incurred in relation to the said sale;

   2.5.2.In payment of fees associated with the nomination of a valuer and any necessary valuation fees;

   2.5.3.In payment of any adjustment of rates;

   2.5.4.In payment to the wife of an amount representing 31.6 per cent of a figure identified by taking $420,000 from the remaining net proceeds of sale [31.6 per cent x (the remaining net proceeds of sale - $420,000)];

   2.5.5.In payment of all moneys owing to any mortgagee in relation to any loans secured by the mortgage registered on the title of the Suburb C property;

   2.5.6.In payment to the parties respectively of all costs incurred by either of them to prepare and facilitate the sale of the Suburb C property provided that each party shall produce to the other copies of receipts, invoices and proof of payment, save that any expenses shall have been consented to prior to incurring the cost;

   2.5.7.In payment of the balance to the husband.

3. As soon as practicable after the making of these Orders the wife do all acts and things necessary, including but not limited to signing all such documents as may be reasonably requested of her by the husband (such documents to be prepared by the husband and at the equally shared expense of the parties) to:

   3.1.Transfer and/or assign to the husband all of her right, title and interest in the issued share capital, if any, of each of D Pty Ltd; E Pty Ltd; and F Pty Ltd (“the Entities”);

   3.2.Transfer and/or assign to the husband all of her right title and interest in any credit loan account, if any, with each of the Entities and/or the Tippett Family Trust (“the Trust”);

   3.3.Transfer and/or assign to the husband all debit accounts that may be owing by her to any of the Entities and/or the Trust;

   3.4.Resign from each and every office she holds with the Entities and the Trust, if any, and withdraw her name, and authorised signatory, immediately from all common accounts;

   3.5.Sign any document that may be provided to her by the husband to give effect to a release of any disputed claim by her against any of the Entities and Trust in respect of any residual employee entitlement or any other claim the wife has or may be entitled to bring in the future; and

   3.6.Sign any such document requested of her by the husband that has the effect of transferring and assigning to the husband any right, position, power, entitlement or interest in the Trust and otherwise relinquishing any right, position, entitlement or power she holds in relation to the Trust.

Superannuation

1. IT IS NOTED:

   4.1.The D Superannuation Fund (“the D Super Fund”) is a self-managed superannuation fund listed by the Australian Taxation Office on the Super Fund Lookup website ( as a complying superannuation fund.

   4.2.The D Super Fund was established under a Deed of Trust dated 26 August 1996 and the rules governing the operation of the Super Fund are contained in the Deed of Trust and the Amending Deed of Trust.

   4.3.The husband and the wife are the only members of the D Super Fund.

   4.4.The Trustee Company of the D Super Fund is a corporation, D Pty Ltd and the husband and wife are the Directors of that corporation.

   4.5.That the requirements of procedural fairness in accordance with s 90MZD of the Family Law Act 1975 (Cth) (“the Act”) have been observed on the basis that the parties are the directors of the Trustee of the D Super Fund.

Superannuation Split to the Wife

1. In accordance with s 90MT(1)(b) of the Act, the wife is entitled to the specified percentage, being 50 per cent, of the husband’s interest in the D Super Fund and the entitlement of the husband is correspondingly reduced.

2. Order 5 of these Orders has effect from the first operative time and the first operative time is four days after service of a sealed copy of these Orders on the Trustee Company of the D Super Fund.

3. The husband and wife, in their capacities as directors of the Trustee Company, shall do all such acts and things and have signed all such documents as may be necessary to cause the accountants for the D Super Fund to:

   7.1.Calculate, in accordance with the requirements of the Act and the Family Law (Superannuation) Regulations 2001 the entitlement created for the wife in Order 5 of these Orders; and

   7.2.Pay the entitlement to the wife whenever the Trustee Company makes a splittable payment out of the husband’s interest in the D Super Fund.

Superannuation Split to the Husband

1. In accordance with s 90MT(1)(b) of the Act, the husband is entitled to the specified percentage, being 50 per cent, of the wife’s interest in the D Super Fund and the entitlement of the wife is correspondingly reduced.

2. Order 8 of these Orders has effect consequent upon compliance with Orders 5 to 7 inclusive of these Orders from the second operative time and the second operative time is five days after service of a sealed copy of these Orders on the Trustee Company of the D Super Fund.

3. The husband and wife in their capacities as Directors of the Trustee Company of the D Super Fund shall do all such acts and things and have signed all such documents as may be necessary to cause the accountants for the D Super Fund:

   10.1.Calculate, in accordance with the requirements of the Act and the Family Law (Superannuation) Regulations 2001 the entitlement created for the husband in Clause 8 of these Orders; and

   10.2.Pay the entitlement whenever the Trustee Company makes a splittable payment out of the wife’s interest in the D Super Fund.

Effect of Superannuation Split

1. That in order to give effect to the superannuation splitting orders contained in Orders 8-10, the intent of which is agreed and acknowledged to divide all assets of the D Super Fund as to 50 per cent to the husband and 50 per cent to the wife in specie, to distribute any tax free components as to 50 per cent to the husband and 50 per cent to the wife and to achieve the appropriate percentage division of assets by reference to their cost base for capital gains tax purposes, upon the Trustee Company giving effect to the splitting order, the husband and wife in their capacities as Directors of the Trustee Company shall forthwith divide within the D Super Fund the assets of the D Super Fund and do all acts and things to attend to the following:

   11.1.Transfer 50 per cent of all cash held by the fund to an account nominated by the wife; and

   11.2.Transfer 50 per cent of each individual parcel of shares or equities as historically acquired by the D Super Fund (and presently held) to be transferred to a share trading account nominated by the wife, and the balance to the husband, and for avoidance of doubt such division and transfer to be carried out conformably with the following example:

   Example:  Assume that the D Super Fund holds 600 shares in X Limited; 200 purchased for $1.00 per share in 2000 (“the 2000 shares”); 200 purchased for $5.00 per share in 2002 (“the 2002 shares”) and 200 purchased for $10.00 per share in 2005 (“the 2005 shares”). The obligation imposed on the trustee shall not simply be to transfer 50 per cent of the shares in X Limited to the wife’s nominated fund, but to transfer 50 per cent of the shares comprising the 2000 shares, the 2002 shares and the 2005 shares.

2. Immediately upon the superannuation splitting Orders taking effect pursuant to Orders 8-12, each of the husband and the wife as directors of the Trustee Company shall do all acts and things and sign all documents necessary to cause a meeting of the D Super Fund  to be held in accordance with the Rules of the Trust Deed for the D Super Fund, the purpose of that meeting being:

   12.1.To note receipt of the request by the wife to transfer her total benefit to the wife’s new nominated superannuation fund and to give effect to this order the wife shall advise the Trustee Company no later than the date of the first operative time provided for in Order 6 as to the details of the wife’s nominated complying superannuation fund so as to give effect to these Orders;

   12.2.To note receipt by the husband of a new interest calculated in his name in the D Super Fund;

   12.3.To authorise the transfer of the total amount of the wife’s benefit to the wife’s nominated complying superannuation fund;

   12.4.To authorise the creation of a new interest in the husband’s name in the D Super Fund.

Wife to Resign as Member and Trustee

1. Before the close of the meeting of the D Super Fund as required by Order 12 hereof, the wife shall do all acts and things and sign all such documents as may be necessary to:

   13.1.Resign her membership from the D Super Fund;

   13.2.Resign as  a director of the Trustee Company,

   13.3.Transfer her shareholding in the Trustee Company to the husband;

   13.4.Vote in favour of any resolution the husband may propose prior to her resignation which may have the effect of appointing an additional or new director to the Trustee Company.

Miscellaneous

1. Except as specifically otherwise provided for by these Orders, as against the husband, the wife is the sole owner of and the husband has no interest in:

   14.1.The wife’s bank accounts;

   14.2.Any public company shares held by the wife;

   14.3.The wife’s motor vehicle;

   14.4.The wife’s superannuation;

   14.5.The property situated at and known as G Street, Suburb H in the State of New South Wales (“the Suburb H property”);

   14.6.The Suburb H property contents; and

   14.7.All other property or financial resources of whatsoever nature and kind in the possession of the wife at the date of these Orders or in the future.

2. Except as specifically otherwise provided for by these Orders, as against the wife, the husband is the sole owner of and the wife has no interest in:

   15.1.The Suburb C mortgage;

   15.2.The husband’s bank accounts;

   15.3.E Pty Ltd Tax Holding CMT NAB Bank Account #...92

   15.4.Any public company shares held by the husband;

   15.5.The husband’s motor vehicles;

   15.6.The husband’s superannuation;

   15.7.The Suburb C property;

   15.8.The Suburb C property contents;

   15.9.The Entities as referred to in Order 3.1;

   15.10.The Trust as referred to in Order 3.2; and

   15.11.All other property and financial resources of whatsoever nature and kind in the possession of the husband at the date of these Orders or in the future.

3. Except where these Orders provide to the contrary, the husband be responsible for and indemnify the wife in relation to all debts and liabilities in his name, including but not limited to:

   16.1.Any credit card liabilities held by the husband either in his sole name or jointly with any third party (other than the wife);

   16.2.Any liabilities due by the husband to the Australian Taxation Office.

4. Except as specifically provided for by any clause comprising these Orders to the contrary, the wife be responsible for and indemnify the husband in relation to all debts and liabilities in her name, including but not limited to:

   17.1.Any credit card liabilities held by the wife either her sole name or jointly with any third party (other than the husband);

   17.2.Any liabilities due by the wife to the Australian Taxation Office.

5. Except as specifically provided for by any clause comprising these Orders to the contrary:

   18.1.The husband hereby indemnifies the wife from and in respect of all actions, claims, suits and demands as may be made against the wife in relation to all liabilities in the name of the husband;

   18.2.The wife hereby indemnifies the husband from and in respect of all actions, claims, suits and demands as may be made against the husband in relation to all liabilities in the name of the wife.

6. By consent orders are made in terms of the document titled “Additional Minute of Order” dated 9 March 2017 which is exhibit 12, as set out hereunder:

   Definitions

   A:“overseas accounts” means:

   i.I Bank UK, Euro Savings Account, Sort Code …, A/c No. …77;

   ii.I Bank UK, British Pounds Current Account, Sort Code …, A/c No. …77;

   iii.J Bank Amsterdam, Euro Account, A/c No. …70;

   iv.J Bank Amsterdam, US Dollar Account, A/c No. …32.

   BY CONSENT IT IS ORDERED:

   1.Forthwith upon the making of these orders the husband shall forthwith do all acts and things necessary and sign all documents required to transfer the funds remaining (if any) in the overseas bank accounts as follows:

   1.1One half to Ms K born … 1995; and

   1.2One half to Ms L born … 1997.

   (“the children”)

   2.Immediately upon the husband’s compliance with order 1, he shall provide to the wife a copy of the said bank transfers.

   3.That within 7 days of the date of these orders, the husband transfer to the child of the marriage Ms L Tippett born … 1997 the 4WD Motor Vehicle presently registered in his sole name.

   4.That within 7 days of the date of these orders the husband list for sale and sell for the best price reasonably obtainable the Japanese Motor vehicle presently registered in his sole name and divide the proceeds of sale between the husband and wife, save that the husband shall be reimbursed for any costs expended by him in registering the car and preparing the motor vehicle for sale from the proceeds of sale and he shall provide copies of all documents in relation to the sale and the costs for which he is to be reimbursed pursuant to this order.

   Notation:  that the bank balances standing to the credit of the overseas bank accounts shall be excluded from the matrimonial pool of assets.

Other Orders

1. Both parties promptly do all acts and things and execute all documents, authorities and writings as are necessary to give effect to all or any of these Orders.

2. In the event that either party refuses or neglects to do any act, execute any deed or instrument necessary to give effect to these Orders, then the Registrar of the Family Law Court be appointed pursuant to s 106A of the Act to take such action, execute such deed or instrument in the name of the defaulting party and to do all acts and things necessary to give validity and operation to the deed or instrument.

1. Leave is granted to the parties to apply within 21 days, on giving at least seven days’ notice to the Court and each other in relation to the wording of these orders.

Note:  The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Tippett & Tippett has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER:  SYC 4778 of 2014

Ms Tippett

Applicant

And

Mr Tippett

Respondent

REASONS FOR JUDGMENT

Introduction

1. These are property settlement proceedings between Mr Tippett (“the husband”) and Ms Tippett (“the wife”).

2. The property settlement dispute relates to the extent of the payments and other orders in favour of the wife. There are disputes about the identity and value of assets. There are disputes about the proportions in which contributions were made and whether there should be an adjustment in favour of the wife.

Applications

1. The parties reached agreement in relation to some issues and orders will be made in terms of an agreed minute (exhibit 12). Otherwise, the wife sought orders in accordance with the Minute of Proposed Order marked exhibit 1.

2. The husband sought orders in accordance with a minute of orders submitted on 9 March 2017 which is exhibit 13.

The Hearing

1. The hearing commenced on 8 March 2017. On 9 March 2017 oral submissions were made and judgment was reserved.

Short History

1. The husband is 63 years of age and the wife is 54 years of age. They commenced cohabitation on 14 February 1993 and were married in 1994. On 10 November 2013 the parties separated under one roof. Between 10 November 2013 and 18 December 2014 the wife stayed for periods at the parties’ holiday home at Suburb H. On 18 December 2014 the wife moved out of the matrimonial home and into the Suburb H property.

2. As at 10 November 2013 the Suburb H loan stood at $96,000.

3. The parties have two adult children:

   (1)Ms K Tippett is 21 years of age. Ms K is a student at the M University and she lives with the father in the Suburb C property; and

   (2)Ms L Tippett is 19 year of age. Ms L is a student at N University and lives at the university during term.

Credibility and Submissions

1. Some factual findings fell to be made on the uncorroborated testimony of the parties. It is therefore necessary to say something about the credit of the parties.

2. Unfortunately, the wife agreed during cross-examination that she gave false evidence. The wife falsely deposed during her oral evidence and in her trial affidavit that when she drew money from the husband’s self-managed superannuation fund pension on 8 January 2015, she did so because she had no money for her expenses. When it was put to her that on 8 January 2015 she had over $17,000 in her bank account, she conceded that fact. No explanation was given for the wife giving false evidence.

3. Both parties had difficulty with evidence about the source of funds for the purchase of the Suburb C property. In a sense the factual dispute is of little import. The husband contends that he paid $260,000 towards the purchase price as well as meeting the purchase costs. Among other evidence the wife contends that she paid $20,000. Therefore, apart from a mortgage advance of $150,000, the purchase price was either funded as to $260,000 by the husband or $240,000 by him and $20,000 by the wife.

4. However, the issue is said to be relevant to the creditworthiness of the parties. The wife contends that she contributed $20,000 to the purchase of the Suburb C property. That is not what she said in her affidavit. There she says that she offered to contribute $20,000, the obvious inference being that she did not in fact contribute to the initial purchase. A few paragraphs later she deposed that she used her $20,000 to assist with the purchase. That could mean that she contributed to moving expenses, set up costs, household contents or immediate necessary improvements or whatever. When asked about this in cross-examination, the wife became upset and asserted that she did contribute $20,000 to the initial purchase. However, later in her affidavit the wife had deposed that she contributed $70,000 to reduce the mortgage on the Suburb C property. The wife explained that the $70,000 was made up of $50,000 from her grandmother’s estate and her initially saved $20,000. Suffice it to say the wife could not both pay $20,000 to the initial purchase and later apply the same money to reduce the mortgage. The wife’s oral evidence is inconsistent with her affidavit and in any event her evidence could well owe more to recent reflection than a clear recollection of historical events. The wife was asked to concede that her affidavit was unreliable and she would not do so. The wife is an unreliable witness, at least on those identified issues.

5. The husband too had some difficulty in the witness box. He has given detailed evidence about his initial contributions and about the purchase of the Suburb C property and yet has no clear recollection of either. I am satisfied that he simply constructed his evidence from the general facts. It is apparently his strong recollection that the only initial contribution to the Suburb C purchase was his. His trial affidavit contained evidence about his initial contribution that was not included in an affidavit sworn by him more than two years before. The most likely reason for that is that the later evidence was not based on any clear recollection.

6. The husband was somewhat argumentative during cross-examination and seemed to be distracted by what he perceived to be the purpose or point of the questions asked rather than simply answering the questions.

7. All of that said, memory is unreliable, with its accuracy being affected by time, perspective and the processes of storing and recalling events. Two otherwise well-motivated witnesses can honestly have a very different recollection of the same event. I cannot simply prefer one witness over the other.

Background Facts

1. The husband was born in 1953.

2. The wife was born in 1962.

3. The husband bought B Street, Suburb C (“the Suburb C property”) in his own name for $410,000. The purchase settled on 12 February 1993 and the parties commenced living there together on 14 February 1993.

4. It is the husband’s evidence that immediately before he purchased the Suburb C property he had $330,964 in assets made up of $229,964 in invested funds, $41,000 in savings and $60,000 in superannuation.

5. The wife contends that she had savings of $20,000 and a motor vehicle at the commencement of cohabitation. The husband disputes those two contentions. After the commencement of cohabitation, the wife’s grandmother died and the wife received $50,000 from her father who was a beneficiary under the grandmother’s will. The $50,000 was applied to the Suburb C mortgage.

6. In 1994 the wife and husband were married.

7. In 1995 Ms K was born.

8. In 1996 the husband established the D Pty Ltd Superannuation Fund. He subsequently applied his compulsory and some voluntary superannuation contributions to the fund. The wife too applied her superannuation contributions to the fund.

9. Ms L was born in 1997.

10. It is the husband’s evidence that by 4 March 1997 the mortgage on the Suburb C property was paid down to under $4,000. In March 1997 the husband redrew $50,000 for renovations to the Suburb C property. On 17 April 1997 the husband drew down another $50,000 for the renovations. In addition during 1997 the husband obtained a loan extension of $200,000. Funds, including $59,960 were applied to repay credit card debts including those incurred renovating the Suburb C property.

11. In November 1999 the property at G Street, Suburb H (“the Suburb H property”) was purchased in the name of the wife for $327,500 using the Suburb C property as security for a loan in the wife’s name.

12. By February 2002 the original loan against the Suburb C property had again been fully repaid.

13. On 10 November 2013 the parties separated under one roof. The wife commenced staying at the Suburb H property from time to time.

14. At that time the Suburb H loan stood at $96,000.

15. On 1 August 2014 the wife commenced these proceedings.

16. On 18 December 2014 the wife permanently moved out of the matrimonial home and into the Suburb H property.

17. The parties were divorced on 27 January 2015 and the divorce took effect on 28 February 2015.

18. On 25 May 2015 interim orders were made in terms agreed by the parties. Those orders included provision for a payment by way of interim property settlement to the wife in the sum of $250,000. The payment was to be made in two tranches, $5,000 and $245,000. The husband was authorised to borrow against the Suburb H mortgage (which is secured against the Suburb C property) in order to make that payment. At that time the mortgage stood at just under $95,000. The husband refinanced the mortgage with the ANZ Bank. He borrowed $420,000, which was applied to discharge the existing loan and to raise $245,000 to pay the second tranche of the interim property settlement to the wife. The balance of the advance, of the order of $80,000, was used by the husband from time to time.

The Approach In Proceedings Under Section 79

1. In the context of these proceedings s 79 of the Family Law Act 1975 (Cth) (“the Act”) relevantly provides:

   FAMILY LAW ACT 1975 - SECTION 79

   Alteration of property interests

   (1)In property settlement proceedings, the court may make such order as it considers appropriate:

   (a)  in the case of proceedings with respect to the property of the parties to the marriage or either of them - altering the interests of the parties to the marriage in the property; or

   ….

   including:

   (c)an order for a settlement of property in substitution for any interest in the property; and

   (d)  an order requiring:

   (i)either or both of the parties to the marriage; …

   ….

   to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.

   ….

   (2)  The court shall not make an order under this section unless it is satisfied that, in all the circumstances, it is just and equitable to make the order.

   (4)  In considering what order (if any) should be made under this section in property settlement proceedings, the court shall take into account:

   (a)  the financial contribution made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and

   (b)  the contribution (other than a financial contribution) made directly or indirectly by or on behalf of a party to the marriage or a child of the marriage to the acquisition, conservation or improvement of any of the property of the parties to the marriage or either of them, or otherwise in relation to any of that last-mentioned property, whether or not that last-mentioned property has, since the making of the contribution, ceased to be the property of the parties to the marriage or either of them; and

   (c)  the contribution made by a party to the marriage to the welfare of the family constituted by the parties to the marriage and any children of the marriage, including any contribution made in the capacity of homemaker or parent; and

   (d)  the effect of any proposed order upon the earning capacity of either party to the marriage; and

   (e)  the matters referred to in subsection 75(2) so far as they are relevant; and

   (f)  any other order made under this Act affecting a party to the marriage or a child of the marriage; and

   (g)  any child support under the Child Support (Assessment) Act 1989 that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage.

2. In Hickey & Hickey & Attorney-General for the Commonwealth of Australia (2003) FLC 93-143 the Full Court identified a preferred four step approach to property settlement determinations. The Court said:

   39. The case law reveals that there is a preferred approach to the determination of an application brought pursuant to the provisions of s.79. That approach involves four inter-related steps. Firstly, the Court should make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing. Secondly, the Court should identify and assess the contributions of the parties within the meaning of ss.79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties. Thirdly, the Court should identify and assess the relevant matters referred to in ss.79(4)(d), (e), (f) and (g), (“the other factors”) including, because of s.79(4)(e), the matters referred to in s.75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties established at step two. Fourthly, the Court should consider the effect of those findings and determination and resolve what order is just and equitable in all the circumstances of the case: Lee Steere and Lee Steere (1985) FLC 91-626; Ferraro and Ferraro (1993) FLC 92-335; Davut and Raif (1994) FLC 92-503; Prpic and Prpic (1995) FLC 92-574; Clauson and Clauson (1995) FLC 92-595; Townsend and Townsend (1995) FLC 92-569; Biltoft and Biltoft (1995) FLC 92-614; McLay and McLay (1996) FLC 92-667; JEJ and DDF (2001) FLC 93-075 and Phillips and Phillips (2002) FLC 93-104.

3. In Hickey the Court was not asked to address the preliminary aspect of the requirement created by s 79(2) as to whether any order should be made. Similarly, the proceedings before me do not involve any controversy about that issue. As was observed in Stanford v Stanford (2012) 247 CLR 108 that preliminary just and equitable requirement is often readily satisfied. Most of the assets and liabilities are in the sole name of the husband. Both parties have invoked s 79, seeking a change in property interests. I note the exhortation in s 81 to as far as practicable, “make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them”. It is just and equitable that the parties have relief under s 79.

4. I turn to the task of identifying orders that will alter the interests of the husband and wife in property in a just and equitable way. There is no mention of steps or stages in s 79, let alone of the sequence set out in a) – d) below. However, I will address the following matters:

   a)Make findings as to the identity and value of the property, liabilities and financial resources of the parties at the date of the hearing;

   b)Identify and assess the contributions of the parties within the meaning of ss 79(4)(a), (b) and (c) and determine the contribution based entitlements of the parties expressed as a percentage of the net value of the property of the parties;

   c)Identify and assess the relevant matters referred to in ss 79(4)(d), (e), (f) and (g), including, because of s 79(4)(e), the matters referred to in s 75(2) so far as they are relevant and determine the adjustment (if any) that should be made to the contribution based entitlements of the parties; and

   d)Consider the effect of those findings and determinations and resolve what order is just and equitable in all the circumstances of the case.

The property of the parties

1. In determining what order is appropriate, it is necessary to make findings as to the property of the parties. That involves identifying assets, liabilities and financial resources and their values.

2. It would be an exaggeration to say that the parties complied with their obligation to settle a joint balance sheet. Ultimately I was provided with two documents albeit with some common entries. I have done my best below to set out the husband’s balance sheet as it was addressed by the parties in submissions:

Assets

Owner		Description	Wife’s value	Husband’s value
1	H	Funds received by the Husband and utilised by him a.   from the jointly held Self-Managed Superfund $309,034 b.   from the increase in the Suburb C Mortgage $80,625	$389,659
2	W	Interim partial property	$250,000	(Refer to 28A)
3	H	B Street, Suburb C Folio Identifier …	$3,100,000	$3,100,000
4	W	G Street, Suburb H Folio Identifier …	$825,000	$825,000
5	J	E Pty Ltd CMT NAB Bank Account #...90	0	0
6	J	E Pty Ltd NAB Bank Account #...05	0	0
7	J	E Pty Ltd Tax Holding CMT NAB Bank Account #9692	$666	$666
8	J	Cash Mgmt (Offset Account) NAB Bank Account #...07	Closed	Closed
9	J	Savings Maximiser NAB Bank Account #...29	0	0
10	H	F Pty Ltd NAB Bank Account #...21	0	0
11	H	ANZ Access Advantage Cheque Account	$1,036	$1,036
12	W	Cash Mgmt NAB Bank Account #...42	Closed	Closed
13	W	NAB Bank Account #...29 (value included in Item 2)	0	0
14	J	Tippett Family Trust	0	0
15	H	Japanese Motor Vehicle (to be sold and the proceeds divided equally)	0	0
16	H	4WD (agreed the car will be transferred to Ms L)	0	0
17	W	European Motor Vehicle	$14,000	$14,000
18	J	Home contents – Suburb C property	$20,642	$20,642
19	J	Home contents – Suburb H property	$8,635	$8,635
20	W	Jewellery	$17,930	$17,930
21	H	E Pty Ltd (H Director)	0	0
22	J	D Pty Ltd (H and W Directors)	0	0
23	H	I Bank UK	0	0
24	J	J BANK Amsterdam (agreed funds to be transferred to children)	0	0
25	H	J BANK Account US (agreed funds to be transferred to children)	0	0
26	H	RBS Shares (agreed funds to be transferred to children)	0	0
27	H	Husband’s German Motor vehicle	(Included in Item 1)	32,000
Total		$4,627,568.00	$4,019,909.00

Addbacks

Owner		Description	Wife’s value	Husband’s value
28   A	W	Interim property settlement to the wife pursuant to consent orders made May 2015	Refer to paragraph 2	$250,000
28	H	Legal fees paid by the husband (including fees in the Trust Account of Barkus Doolan presently).	$72,792	$130,291.95
29	W	Legal fees paid by the Wife prior to the payment of $250,000 interim property settlement from commencement of proceedings to 25 August 2015 after which the legal fees paid are included in item 1	$46,245	$46,245
Total		$119,037.00	$426,536.95

Liabilities

Owner		Description	Wife’s value	Husband’s value
30	J	Mortgage – B Street, Suburb C	$420,000	$420,000
31	J	Tax (Est. BAS and PAYG Tax for July to September 2014 – Payable November 2014)	0	0
32	H	Income Tax for 2015 and 2016 Financial Year	Not matrimonial	$43,000
33	H	ANZ Black American Express and Visa	Not matrimonial	$16,389
34	H	ANZ Platinum American Express and Visa	Not matrimonial	$14,604
35	H	NAB Visa Card	Not matrimonial	$6,167
36	H	NAB Visa Card	Not matrimonial	$7,712
37	J	E Pty Ltd loan to self-managed superfund	$18,784	$18,784
Total		$438,784.00	$526,656.00

Superannuation

Owner		Description		Wife’s value	Husband’s value
38	J	D Self-Managed Superannuation Fund	Value of portfolio	$1,896,541	$1,896,541
39	H	Loan to E Pty Ltd payable to D S/F	Outstanding loan	$18,784	$18,784
40	W	O Self-Managed Super Fund	$6,664	$6,664
Total		$1,921,989.00	$1,921,989.00

Note:  The table is reformatted from the content of exhibit 10 save that:

a) due to a late change in the figure for item 29 the husband’s total for add-backs was wrongly shown as $426,537.95 rather than $426,536.95;

b) the husband’s total for liabilities was wrongly shown as $526,658 rather than $526,656.

1. As to the issues about the balance sheet:

Item 1:  Funds received by the husband from superannuation and the Suburb C mortgage and utilised by him

1. The consideration of this item also involves items 2 and 28A.

2. The wife contends that there should be included in the pool, $389,659 made up of drawings by the husband, including pension payments in an amount of $309,034 from the parties’ self-managed superannuation fund since separation and $80,625 drawn on the Suburb C mortgage. The husband opposes any amount being added back to the balance sheet but contends that in any event, the amount drawn from superannuation was $303,035 rather than $309,034.

3. In other cases there have been circumstances where assets that no longer exist have been included in the balance sheet prepared at the first stage of the process of identifying a just and equitable division of property. The same logic has been applied to exclude from the relevant list of current liabilities, debts that do exist at the date of the hearing.

4. Often legal fees are treated in that way, with paid legal fees added back to the list of current assets and unpaid legal bills, ignored for the purposes of compiling the list of relevant liabilities. The current state of the authorities on this issue has no circumstances whereby add-backs must be included, nor are add-backs proscribed in all situations. However, they have been found to be “the exception rather than the rule…” (see Cerini & Cerini [1998] FamCA 143 at [46]).

5. Arguing against adding back the funds available to the husband since separation from superannuation and the mortgage is the fact that, as is referred to above, the first of the steps described in Hickey (above) is to identify and value “the property, liabilities and financial resources of the parties at the date of the hearing” (bold emphasis added).

6. The obvious problem created by add-backs is their artificiality. The Court’s power under s 79 of the Act is to change interests in property. There is no practical utility in changing interests in property that does not exist. The greater the provision for add-backs in a pool established for the purposes of proceedings pursuant to s 79 of the Act, the greater the difficulty in making sensible orders to give effect to the ultimate property settlement. To labour the point, the scope for changing interests in property is limited to the value of the property that exists.

7. In these proceedings, the issue about this item is made more complicated because of the agreement reached between the parties that the wife’s interim property settlement of $250,000 would be added back. Although she initially sought the interim settlement for other purposes, the wife applied some of those funds to her living expenses and to the benefit of the parties’ daughters. It is unremarkable to include in the balance sheet the proceeds of an interim or partial order for property settlement. However, it would be unfair to add-back the funds applied by the wife to her living expenses and expenses of the children unless the husband’s expenditure on those same categories of liability is also added back. The problem comes in finding a principled way to make the necessary allowances.

8. None of those considerations warrant adding back to the balance sheet all of the drawings on superannuation and on the mortgage by the husband since separation. No case was made to add back some identifiable part of the drawings. Although I apprehend someone may have thought otherwise, it is not the Court’s role to pour over the parties’ evidence and disclosure documents, to analyse categories of expenditure and to add-back some moneys applied to various expenses to the list of assets.

9. For those reasons I do not propose to add back $389,659 to the balance sheet and I have not been provided with a basis on which I can add back some part of that sum. Given that approach it is not necessary to resolve the dispute as to whether the husband’s drawings on superannuation were $309,034 or $303,035.

Item 2 and 28A:  Wife’s interim property settlement

1. The wife received $250,000 pursuant to an interim property settlement order made on 25 May 2015. The assumption agreed by the parties was that the settlement advance would be included in the balance sheet. During final submissions learned senior counsel for the husband pointed out that, given the way in which the wife’s case was argued, it was too late for her to resile from that position at the end of final submissions. I agree. However, s 79(2) of the Act requires that the Court be satisfied that property settlement orders are just and equitable. Where none of the capital drawings by the husband applied to his living expenses to the expenses of the parties’ daughters and what might be described as discretionary expenditure, are added back to the balance sheet, it is potentially unfair that the wife’s capital drawings applied to those same purposes be all added back.

2. Notwithstanding that there was no detailed help with the exercise, and notwithstanding, as I have argued above, in my view it is not the Court’s role, I will attempt to identify the extent to which the wife has been unfairly treated by her concession in relation to adding back the entire $250,000 advanced to her. Commencing at paragraph 103 of the wife’s trial affidavit she sets out how she has applied the $250,000. Some of the expenses she identifies would result in an add-back in any event and others would not normally be added back. Dealing with the wife’s accounting for the advanced funds:

   a)Pursuant to the orders of 25 May 2015, $20,000 was applied to repay a drawing made by the wife on the parties’ superannuation fund. But for that repayment, there would have been an argument that the $20,000 drawing should have been added back. The drawing was not needed for living expenses. When the wife drew that sum she had more than $17,000 in her savings account. But for the inclusion of the $250,000 interim settlement in the balance sheet, the wife should have added back an additional $17,000. That amount would be properly added back.

   b)The amount of $37,070.26 was applied to legal fees in these proceedings. The wife has also added back $46,245 (item 29) but that related to costs paid prior to the interim property settlement. Therefore, but for the inclusion of the $250,000 interim settlement, the wife should have added back an additional $37,070.26. That amount would be properly added back.

   c)I gather that $606 was applied to legal fees for unrelated purposes. It is not clear why that amount should be added back.

   d)The amount of $142,282 was applied to investments. In her most recent Financial Statement the wife includes items for her Macquarie Bank account (item 37) at $22,243 and shares (item 38) at $109,419. Those amounts total $131,662. There is no evidence about the fate of the balance of the $142,282.  But for the inclusion of the $250,000 interim settlement in the balance sheet, $131,662 would have been included in the balance sheet. Of the $250,000, $131,662 would have appeared in the balance sheet in any event.

   e)The amount of $4,090 was applied to medical costs. Assuming those were the medical costs of the wife or of one or both of the children, those amounts would not normally be added back.

   f)The amount of $7,271 was applied to bills and utilities. In the normal course those payments would not be added back to the balance sheet.

   g)The amount of $3,063 was applied to accounting fees. If they were accounting fees for the purposes of these proceedings, they would normally be added back as a disbursement associated with the costs of the proceedings. If they were private accounting fees incurred in the normal course, they would not normally be added back. The wife’s costs notification includes reference to counsel’s fees and other disbursements. There is no reference to a disbursement for $3,063 for accounting fees. I assume the expense was incurred in the normal course. It should not be added back.

   h)The amount of $4,000 was applied to expenses of or for the children. There is no reason for that amount to be added back.

   i)The amount of $7,563 was applied to furniture and household items for the Suburb H property. The household contents are already accounted for at item 19 of the draft balance sheet. Therefore it would be double counting to include this expense. There is no reason for that amount to be added back.

   j)The amount of $1,000 was applied to a deposit for a university expense associated with Ms L. There is no basis for adding back that expense.

   k)The amount of $10,000 was applied to an overseas trip to visit Ms L. Minds would differ about this item. It could be seen as a cost associated with a child. On the other hand it could be seen as a personal benefit for which the husband should not share the cost. Given the extent of the husband’s expenditure on child related expenses, I will categorise it as child related.

   l)The amount of $2,043 was applied to a trip to P Town with the children. Again, minds could differ about the extent to which this expense was for the benefit of the wife. That said there is no way in which the expense can be disaggregated to identify that component. In my view this expense would not normally be added back.

   m)The amount of $1,538 was applied to hotel and other expenses in Sydney for Ms K. In my view this expense would not normally be added back.

   n)The amount of $555 was applied to new car tyres. Presumably the tyres were applied to one of the motor vehicles included in the balance sheet or specifically dealt with under the separate and agreed orders. There is no basis for adding back this expense.

   o)The amount of $100 was applied to the overseas expenses of Ms K and Ms L. There is no basis for adding back this expense.

   p)The amount of $8,820 was applied to general living expenses of the wife and to make up for the deficiency between the wife’s income and her expenses. There is no basis for adding back this expense. Life goes on between separation and a final hearing. Income is earned and expenses are incurred. Similar expenses for the husband have not been added back. Again, the date for identifying and valuing the relevant pool of assets is the date of the hearing.

3. I have expressed those findings in the table below.

Item	Properly added back	Should not be added back
a) $20,000 from superannuation fund	$20,000	0
b) $37,070.26 was applied to legal fees	$37,070.26	0
c) $606 to other legal fees	0	$606
d) $131,662 represents the wife’s bank account and shares	$131,662	0
e) $4,090 applied to medical costs	0	$4,090
f) $7,271 was applied to bills and utilities	0	$7,271
g) $3,063 applied to accounting fees	0	$3,063
h) $4,000 applied to expenses of the children	0	$4,000
i) $7,563 contents of the Suburb H property	0	$7,563
j) $1,000 university deposit for Ms L	0	$1,000
k) $10,000 applied to an overseas trip to visit Ms L	0	$10,000
l) $2,043 was applied to a trip to P Town with the children	0	$2,043
m) $1,538 to hotel and other expenses for Ms K	0	$1,538
n) $555 applied to new car tyres	0	$555
o) $100 was applied to the overseas expenses of Ms K and Ms L	0	$100
p) $8,820 applied to general living expenses of the wife	0	$8,820
Totals	$188,732.26	$50,649.00

1. In my view, the wife will be unfairly treated if some allowance is not made for the fact that, included in the $250,000 she has added back to the balance sheet is $50,649 spent on living and child related expenses. The husband has not been treated in that way. In a letter from his solicitors dated 18 January 2017 (exhibit 6), the husband explains how his superannuation drawings in the 2015/2016 and 2016/2017 years were applied. It can be seen from that disclosure that the husband’s expenditure on his living expenses was very substantially greater than that of the wife over a similar period.

2. This issue could be addressed in a number of ways but at the minimum, $50,649 from the add-back of $250,000 will be excluded from the add-back. I will add-back the net figure of $199,351 to the wife’s side of the ledger for the interim property settlement she received. Even then, the husband has done better out of the preliminary distributions, access to income and consumer debts included in the balance sheet. I will address that situation under s 75(2)(o).

Item 15:Japanese motor vehicle

1. It is agreed that the Japanese motor vehicle will be sold and the proceeds divided between the parties. An allowance will be made to the husband for any costs he incurs in registering and preparing the vehicle for sale. There is no value ascribed to the vehicle and therefore there is no practical utility in it remaining in the balance sheet. I will make an order in terms of the parties’ agreement.

Item 16:4WD motor vehicle

1. It is agreed that the 4WD motor vehicle used by Ms L will be transferred to her. There is no value ascribed to the vehicle and therefore it can be safely removed from the balance sheet. I will make an order in terms of the parties’ agreement to transfer the vehicle to Ms L.

Item 24, 25 and 26:  Funds in overseas bank accounts

1. Ultimately the parties agreed to apply the balance of these accounts to the benefit of the children. In accordance with the parties’ agreement, I will exclude those account balances from the balance sheet and will order that they be divided equally between the children.

Item 27:Husband’s German motor vehicle

1. The vehicle was purchased for $36,000. The husband contends that it is worth $32,000. There is no formal valuation evidence. The vehicle was purchased in the last year or so. In the absence of better evidence I will include the motor vehicle in the balance sheet at the purchase price of $36,000.

Item 28A:Interim property settlement to the wife

1. I have addressed this issue at item 2.

Item 28:Legal fees paid by the husband

1. The husband seeks an allowance for his paid legal costs of $130,291.95. The wife seeks a lesser sum because she sought to avoid any double counting of an add-back for the husband’s capital drawings. There will be no such add-back. The husband’s figure is slightly greater than is disclosed in his costs advice letter (exhibit 3) but there is presumably a basis for that difference. I will include this item at $130,291.95.

Item 32:Income tax (H) for 2015 and 2016 financial years

1. The husband has a tax debt for the 2015 and 2016 financial years. The wife contends that the debt is “not matrimonial”. There is no reason to ignore that debt.

Items 33 - 36:  The husband’s consumer debts

1. The husband has various credit card debts. The complaint raised by the wife is that the debts were “not matrimonial”. There is no challenge to the fact of the liabilities. As is referred to above, there is no proper basis for ignoring them. Given the agreed approach to the wife’s interim property settlement and the fact that the wife does not have any consumer debt at the time of the hearing, there is a level of unfairness about this item. However, I will address that under s 75(2)(o) later in these reasons.

Item 37:  The company (E) borrowed $18,784 from the self-managed superannuation fund

1. This item appears both as a debt of the parties and as an asset of the superannuation fund (item 39). The husband will retain the company and therefore although it is a joint debt, in the final accounting it will appear as a debt of the husband.

2. I find that the net pool of assets is made up of the following:

Assets

Owner		Description	Value
1	W	Interim partial property settlement	$199,351
2	H	B Street, Suburb C Folio Identifier …	$3,100,000
3	W	G Street, Suburb H Folio Identifier …	$825,000
4	J	E Pty Ltd Tax Holding CMT NAB Bank Account #...92	$666
5	H	ANZ Access Advantage Cheque Account	$1,036
6	W	European Motor Vehicle	$14,000
7	J	Home contents – Suburb C property	$20,642
8	J	Home contents – Suburb H property	$8,635
9	W	Jewellery	$17,930
10	H	Husband’s German Motor vehicle	$36,000
11	H	Legal fees paid by the husband (including fees in the Trust Account of Barkus Doolan presently)	$130,291.95
12	W	Legal fees paid by the Wife prior to the payment of $250,000 interim property settlement from commencement of proceedings to 25 August 2015 after which the legal fees paid are included in item 1	$46,245
Total		$4,399,796.95

Liabilities

Owner		Description	Husband’s value
13	J	Mortgage – B Street, Suburb C	$420,000
14	H	Income Tax for 2015 and 2016 Financial Year	$43,000
15	H	ANZ Black American Express and Visa	$16,389
16	H	ANZ Platinum American Express and Visa	$14,604
17	H	NAB Visa Card	$6,167
18	H	NAB Visa Card	$7,712
19	H	E Pty Ltd loan to self-managed superfund	$18,784
Total		$526,656.00

Superannuation

Owner		Description		Value
20	J	D Self-Managed Superannuation Fund	Value of portfolio	$1,896,541
21	H	Loan to E Pty Ltd payable to D S/F	Outstanding loan	$18,784
22	W	O Self-Managed Super Fund	$6,664
Total		$1,921,989.00

Net assets

1. Therefore the net assets of the parties total $5,795,129.95 [($4,399,796.95 - $526,656) + $1,921,989]. Of that sum $1,921,989 is in the form of superannuation interests and $3,873,140.95 is not superannuation.

Contributions

1. The obligations placed on the Court by s 79 call for an assessment of the respective contributions by and on behalf of the husband and wife.

2. The parties argued the case on a global basis and I will adopt the same approach.

3. The parties disagree about when cohabitation ceased. The dispute is about the extent to which the parties cohabited between separation under one roof in November 2013 and the date the wife finally moved to the Suburb H property in December 2014. The wife would have it that during that period she was substantially living at Suburb C and the husband argues that she mainly lived away from Suburb C. The date of final separation can be relevant to some issues in respect of property settlement[1] but it does not have much significance in respect of contributions. Contributions can be made before, during and after cohabitation. It is difficult to see that the effective date of separation has significance in relation to the assessment of contributions in this case.

   [1] For example paragraphs s 75(2)(j) and (k) of the Act

Section 79(4)(a) Contributions

1. Financial contributions to property, both direct and indirect were made by each of the husband and wife.

2. It is the husband’s evidence that immediately before cohabitation he had $330,964 in assets made up of $229,964 in invested funds, $41,000 in savings and $60,000 in superannuation.

3. At the point of the commencement of cohabitation the husband purchased the Suburb C property in his own name for $410,000. It is his case that he made the only contribution to the purchase. He paid a deposit of $41,000 and met the costs of purchase. The husband drew $150,000 on a mortgage facility of $170,000 with the National Australia Bank to settle the purchase on 12 February 1993. That left a shortfall of $219,000 which was paid on settlement. The wife contends and the husband disputes that she paid $20,000 towards the purchase. Thus in addition to the costs of purchase, the husband contributed either $260,000 or $240,000. The wife either contributed $20,000 or nothing to the initial purchase.

1. The wife contends her initial/early contributions included savings of $20,000 at the commencement of cohabitation and that she received a gift of $50,000 early in the marriage that was applied to reduce the Suburb C mortgage. She also contends and the husband disputes that she had a motor vehicle at the commencement of cohabitation. Whether at the point of purchase or soon thereafter, I accept that the wife injected $20,000 to the purchase.

2. The parties were both in paid employment at the commencement of cohabitation. Prior to 1995 the husband worked for two banks. From 1995 to 2005 he worked for another bank. In 2005 he was made redundant. He was paid net $266,000 in redundancy payments and applied those funds to the parties’ superannuation fund. From 2005 to 2015 the husband was self-employed as a consultant through his company E Pty Ltd. From April 2012 to December 2014 he worked as a contractor in Brisbane with Q Pty Ltd. In November 2013 his role was reduced from five days a week to one and a half days per week. He resigned in December 2014 and commenced a similar role with the R Group. His contract was terminated in November 2015 and despite many applications he has not had significant income from paid employment since that time.

3. The wife says that she was working full time when cohabitation commenced. After the parties’ marriage in 1994 she reduced her work to three days and later to one day per week. The husband has a slightly different recollection but nothing significant turns on the issue. When she became pregnant with Ms K (who was born in 1995), the wife left the paid workforce and did not return until 2012 when she commenced part-time work with her current employer.

4. The rate, duration and total of the husband’s income greatly exceeded those of the wife during the marriage. As with his periodic income, the husband’s redundancy payment of $266,000 was an incident of his employment. The initial injection of funds by the husband was substantially more than that by the wife and, in the form of the Suburb C property, provided the matrimonial home throughout the marriage and it continues to represent the most valuable financial asset of the marriage.

5. The husband made the greater financial contribution.

Section 79(4)(b) Contributions

1. This provision deals with direct and indirect non-financial contributions other than those made in the form of parent and homemaker contributions.

2. The husband incorporated the company that was the vehicle for his consultancy services. There were renovations to the Suburb C property. Each of the parties played a role in supervising and organising tradespersons. It was the husband’s practice to attend on the worksite in the morning and after work. The wife was able to attend and did attend during the day.

3. The wife performed the accounting, recording and finance activities for the consultancy business and for the household. She managed the family financial records and systems.

4. Each of the parties made non-financial contributions.

Section 79(4)(c) Contributions

1. This provision deals with contributions to the family including contributions in the form of homemaker contributions and contributions to children of the marriage.

2. It is the wife’s case that her contributions as parent and homemaker were greater than those of the husband.

3. The husband was asked about this issue and in his view, his contributions to the family, including as parent and homemaker were equal to those of the wife. He conceded that he travelled with his work and that he worked for long hours. In his trial affidavit he deposed that the wife was the primary carer for the children when they were young. As I understood the husband’s evidence in cross-examination, he resiled from that concession. As I understood his evidence, the husband considers that he made valuable contributions while away with work by Skype sessions during which he assisted with the children’s homework. He says that the wife had the assistance of paid help with the household and the children. Finally, he made reference to the quality of his homemaker and parenting contribution. I took him by that to mean that while he was able to commit fewer hours to parenting and homemaker tasks than the wife, such was the difference in quality between his efforts and those of the wife, (presumably his being of greater quality) his contributions of that type were equal to hers.

4. In my view the husband’s initial concession was correct and he cannot make the case he now seeks to make. The husband’s evidence on this aspect of contributions is contained in three paragraphs of his trial affidavit – paragraphs 54, 55 and 56. He commences with the now retracted concession but goes on to say that when he was not working or travelling, he was involved in all aspects of the children’s care, including helping to prepare meals, changing nappies when they were young, bathing the children, playing with the children, reading to them and taking them on outings.

5. He does not challenge the wife’s evidence, for example, that in the year in which Ms L was born and during which the Suburb C renovations were undertaken, he was only home for 52 days. The husband worked from Brisbane for 18 months from April 2012 to October 2013, staying there during the working week and coming home on the weekends. The husband agreed that he otherwise worked long hours at his paid employment. There was, on his own evidence, less than six months when he was not in paid employment during 20 years of marriage. There was simply not the time for the husband to make the contributions to the welfare of the family that he contends for. As to the idea that his parent and homemaker contributions were of substantially greater quality than those of the wife, allowing that such a thing is possible, there is not one word of evidence given in his case, to advance that proposition.

6. The wife was the primary care giver for the children. That is not to say that the husband was not involved. However, his employment involved long hours and travel and he simply was not present when much of the parenting task was performed. The parties were separated under one roof from November 2013 and their final physical separation occurred in December 2014. Throughout that period and since, the husband continued to live at the Suburb C home. However, Ms K turned 18 prior to the November 2013 separation and Ms L reached majority on 23 January 2015.

7. The wife made the greater contribution to the family, including her roles as parent and homemaker.

Conclusion on Contribution

1. It is the case of the husband that he made 60 per cent of the contributions compared to 40 per cent made by the wife. It is submitted for the wife that the parties’ contributions were equal.

2. In my view, the resolution of the dispute between the parties on this issue turns on the import of the imbalance of initial/early contributions of the parties. Those initial/early contributions could be described as:

   ·The husband had about $330,964 in assets made up of $229,964 in invested funds, $41,000 in savings and $60,000 in superannuation;

   ·The wife had as much as $70,000 ($20,000 in savings and $50,000 from her father) and a motor vehicle.

3. As to the use to which the injections were put[2], the husband’s initial contribution provided the property that was the matrimonial home throughout the marriage and which remains the most financially valuable asset of the marriage.

   [2]Pierce and Pierce (1999) FLC 92-844

4. Despite valuable contributions of different sorts made by both parties over more than 20 years, in my view there remains an imbalance of contributions in favour of the husband as a result of the foundation he provided. As to the extent of the imbalance, the husband’s proposal would have the parties more than $1 million apart, based on contribution. In my view that would effectively ignore the valuable contributions made by both parties during the marriage and since. In my view a proper assessment would put the respective contributions at 52.5 per cent by the husband and 47.5 per cent by and on behalf of the wife. In the context of these proceedings that would mean a difference between the parties of the order of $290,000.

The other matters in Section 79

1. Once contributions have been assessed, the other factors in s 79(4) need to be considered. They are:

Section 79(4)(d)

1. Pursuant to s 79(4)(d) I am required to take into account the effect of any proposed orders on the earning capacities of the husband and wife. No such effect was identified by either of the parties but in circumstances where the husband’s income is currently from the parties’ self-managed superannuation fund, the splitting order they both propose is likely to impact adversely on the pension available to the husband.

Section 79(4)(e) - Section 75(2) factors

1. The most relevant matters in s 75(2) would seem to be paragraphs (a), (b), (j), (k), (m) and (o).

(a)  the age and state of health of each of the husband and wife;

1. The husband and wife are 63 and 54 years of age respectively. They are both apparently in good health.

(b)  the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;

1. The wife receives $774 each week. She earns $665 per week as a project co-ordinator for a strata title and community management company. She also receives $10 per week in interest and about $109 in dividends. The wife spends $1,445 per week including fixed expenses of $67 in income tax, $92 in superannuation payments, $104 in rates and strata fees, $32 in life insurance, $53 in medical insurance, $8 in CTP insurance, $13 to insure her motor vehicle, $15 to insure the contents of the Suburb H property and $7 to register her motor vehicle. The wife estimates that she spends a further $1,054 on food and other living costs. Of those expenses $120 per week is spent on accounting fees and $61 per week on work-related education.

2. The evidence about the wife’s assets and liabilities is set out earlier in these reasons.

3. The husband receives $3,460 per week by way of pension from the parties’ self-managed superannuation fund, D Super Fund. He records in his Financial Statement that he is director/consultant but he shows no income from those activities. He lives with the parties’ daughter, Ms K who earns $350 per week. Ms L lives with the father in university breaks and she earns $20 per week. He spends $4,936 each week made up of $361 on the ANZ mortgage, $40 on rates for the Suburb C property, $38 on home insurance and $19 on contents insurance. He spends $61 per week registering the German, 4WD and Japanese motor vehicles, and $4,417 on all other expenditure, which is not itemised. The husband estimates that of his expenditure, $428 per week is applied to Ms K’s expenses and $957 per week to those of Ms L.

4. The evidence about his assets and liabilities is addressed above.

5. I gather from the Case Outline document filed in the husband’s case that there is a dispute about whether the parties’ are exercising their earning capacities. Of course the parties will do what they want about seeking and taking up further or different or additional employment. The issue here is about their capacity - “the physical and mental capacity of each of them for appropriate gainful employment”.

6. The wife works part-time on a casual basis. She has not looked for employment beyond her current position and has not applied to extend that position to a full-time one. She accepts that there would be other employment available to her but is not interested in changing her employment. It is submitted on behalf of the husband that the wife could be earning over $80,000 in her current role if it was on a full time basis.

7. The husband has made a number of job applications and has otherwise looked for work. The husband is nearly 10 years older than the wife. He is closer to retirement than he is to the start of his career but in my view, he continues to have a significant working capacity. His own evidence of job seeking is testament to his expectation that he will be able to return to the paid workforce. He has held very responsible jobs and has been very well remunerated over the years. Even, if he is unable to return to the heights of his previous roles, as was put to the wife by the husband’s counsel in cross-examination about her own circumstances, the husband has skills and experience that would fit him for other, albeit perhaps less well-remunerated, employment. I would venture that the husband could be earning significantly more than the $80,000 per annum which his counsel asserted, could be earned by the wife.

8. As well as a verdict ultimately delivered by the relevant job market/s, retirement is often a personal decision. The wife probably has the potential for more future years in the workforce than the husband. Nevertheless, because of his extensive and highly remunerated career, in my view the husband has a greater physical and mental capacity for paid employment than the wife.

(c)  whether either party has the care or control of a child of the marriage who has not attained the age of 18 years;

1. The parties’ children are over 18 years of age.

(d)  commitments of each of the parties that are necessary to enable the party to support:
(i)  himself or herself; and
(ii)  a child or another person that the party has a duty to maintain;

(e)  the responsibilities of either party to support any other person;

1. I have set out above, what there is of the evidence in relation to the parties’ expenses. Each of the parties appears to accept a responsibility to support Ms K and Ms L, even though they are now adults. The husband has provided greater support than the wife but much, if not all, of that has been provided from joint funds. Ms K may be nearing the end of her undergraduate studies but I assume that Ms L has some years of university study ahead of her. Ms L’s costs are greater because of her need for accommodation during university terms.

(f) Subject to subsection (3), the eligibility of either party for a pension, allowance or benefit under:
(i)  any law of the Commonwealth, of a State or Territory or of another country; or

(ii)  any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia, and the rate of any such pension, allowance or benefit being paid to either party;

1. The parties both have superannuation interests but the husband’s interest is far more valuable than that of the wife and only his account is in the payment phase.

(g)  where the parties have separated or the marriage has been dissolved, a standard of living that in all the circumstances is reasonable;

1. The former matrimonial home at Suburb C is apparently a comfortable property. No doubt each of the parties would seek and expect for the other, a comfortable standard of living in the future.

(h)  the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income;

1. Neither of the parties gave evidence about retraining or starting a new business.

(j)  the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party;

1. The wife’s role with the household and the children freed the husband to build a successful career, working long hours and involving significant work-related travel.

(k)  the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;

1. On the common ground evidence there were elements of the marriage that persisted in the period leading up to the wife’s permanent move into the Suburb H property. During the marriage, the parties gave priority to the husband’s career over that of the wife. The wife ceased full-time employment very early in the relationship and was out of the paid workforce for many years. During the marriage the husband was able to gain experience and develop skills through a very successful career.

(m)  if either party is cohabiting with another person — the financial circumstances relating to the cohabitation;

1. The only relevant cohabitation is that of Ms K and at times, Ms L, with the husband. I have set out above what evidence there is on that topic.

(o)  any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account;

1. Because of the husband’s use of joint funds between separation and the hearing, I have adjusted the extent to which the wife’s interim property settlement is added back to the balance sheet. Nevertheless an allowance is warranted to the wife because of the imbalance in the use by the parties of joint funds in recent years. The parties’ disclosure about their expenditure was summary in nature but on any view, the husband has done better than the wife out of the use of matrimonial funds since separation.

2. In the financial year ending 30 June 2016 the husband’s company showed income of about $218,000 of which $131,750 was allocated to wages. I assume those were the husband’s wages. In addition to that income, the husband had access to drawings of more than $380,000 in superannuation and a mortgage advance. Further, while the wife has managed without any significant consumer borrowings, the husband borrowed $44,872 on credit cards. The potential pool of assets for division has been reduced by a total of $424,872 because of the husband’s expenditure. True it is that the husband paid the Suburb C outgoings, including the recurrent mortgage instalments, presumably on an interest only basis, and has met the greatest share of the expenses of the children. Nevertheless, this factor argues for an adjustment in favour of the wife.

3. Otherwise, nothing comes to attention here.

Section 79(4)(f)

1. Beyond those referred to above, there are no relevant orders made under the Act.

Section 79(4)(g)

1. There is no child support assessment.

Conclusion

1. Ultimately, the wife seeks an adjustment in her favour of her of five per cent. The husband argues that there should be no adjustment.

2. The relevant matters arising from the remaining elements of s 79, which include the s 75(2) factors referred to above are:

   ·The wife is nearly 10 years younger than the husband;

   ·Based on contributions alone, the husband will receive about $290,000 more than the wife;

   ·The husband has a greater capacity for earning than the wife;

   ·The wife contributed to the husband’s earning capacity;

   ·The wife’s earning capacity was probably diminished because of the marriage;

   ·The husband had far greater use of joint funds since the final separation in December 2014.

3. All but the first of those factors is consistent with or does not argue against an adjustment in favour of the wife. The extent of the adjustment must be tempered because of the potential impact of the difference in the ages of the parties. In my view the allowance should be 2.5 per cent. Given the finding on contribution that would result in an equal division between the parties.

Just and Equitable

1. The net assets of the parties total $5,795,129.95. Of that sum $1,921,989 is in the form of superannuation interests and $3,873,140.95 is not in superannuation.

2. In terms of the net pool of assets identified above, if the assets are divided equally then each of the parties would have about $2,897,565. As to the form of the orders, the parties agree that the husband should have the opportunity to retain the Suburb C property and to pay the wife out. The husband seeks three months to secure the necessary finance and the wife thinks it should be six weeks[3]. Both parties seek a splitting order in favour of the wife from the husband’s superannuation entitlement in the self-managed superannuation fund, although they disagree about the quantum or percentage of the base amount.

   [3] The orders sought by the wife say 28 days but I understood the wife’s counsel to say six weeks

1. Of the pool of assets identified by me, the wife has the benefit of and would like to retain:

Owner		Description	Value
1	W	Interim partial property settlement	$199,351
2	W	G Street, Suburb H Folio Identifier …	$825,000
3	W	European Motor Vehicle	$14,000
4	J	Home contents – Suburb H property	$8,635
5	W	Jewellery	$17,930
6	W	Legal fees paid by the wife prior to the payment of $250,000 interim property settlement from commencement of proceedings to 25 August 2015	$46,245
7	W	O Self-Managed Super Fund	$6,664
Total		$1,117,825.00

1. In order to bring her to 50 per cent of the net assets ($2,897,565) she would need to receive $1,779,740 in superannuation and non-superannuation assets.

2. That would leave the husband with:

Owner		Description	Value
1	H	B Street, Suburb C Folio Identifier …	$3,100,000
2	J	E Tax Holding CMT NAB Bank Account #...92	$666
3	H	ANZ Access Advantage Cheque Account	$1,036
4	J	Home contents – Suburb C property	$20,642
5	H	Husband’s German Motor vehicle	$36,000
6	H	Legal fees paid by the husband (including fees in the Trust Account of Barkus Doolan presently)	$130,291.95
7	J	D Self-Managed Superannuation Fund	$1,896,541
8	H	Loan to E Pty Ltd payable to D S/F	$18,784
9	J	Mortgage – B Street, Suburb C	-$420,000
10	H	Income Tax for 2015 and 2016 Financial Year	-$43,000
11	H	ANZ Black American Express and Visa	-$16,389
12	H	ANZ Platinum American Express and Visa	-$14,604
13	H	NAB Visa Card	-$6,167
14	H	NAB Visa Card	-$7,712
15	H	E Pty Ltd loan to self-managed superfund	-$18,784
16	Payment / splitting order to wife (see the preceding paragraph)	-$1,779,740
Total		$2,897,564.95

1. There remain two issues: the proportions in which the division should be expressed in terms of superannuation and non-superannuation assets; and the best way to deal with the likelihood of changes in the value of the main asset and superannuation interests from the date of the hearing to the date effect can be given to Court orders.

2. As to the first issue, assets in the form of superannuation have restrictions on access and whereas the husband’s interest is in the payment or pension phase, the wife may not be able to obtain any meaningful access to superannuation until she leaves the paid workforce. Nevertheless the simplest approach is to express the wife’s settlement as between superannuation and non-superannuation interests in the about the same proportions as they are represented in the pool. Reading the parties’ proposed orders they seem to argue for a superannuation split in similar proportions to the overall division argued for by them.

3. As to the splitting order, the requirements of format and notice necessitated by the provisions of the Act, to comply with the superannuation laws are not required here because the fund is self-managed and the parties are the trustees. I will use the form of order set out in the husband’s Minute of Orders (exhibit 13) to make a splitting order from the husband’s account in the parties’ main superannuation fund based on a percentage of 50 per cent. That would slightly favour the wife as she has $6,664 in a separate fund.

4. The main superannuation fund makes up $1,915,325 of the pool.

D Self-Managed Superannuation Fund
D Self-Managed Superannuation Fund	$1,896,541
Loan to E Pty Ltd payable to D S/F	$18,784
$1,915,325

1. Based on the found net pool, the wife is to receive a further $1,779,740, in addition to what she already has. A splitting order of the main fund based including the loan owed to it, on 50 per cent will bring to the wife’s side of the ledger the amount of $957,662.50. Therefore the adjustment to her in addition to the superannuation splitting order should be $822,077.50 ($1,779,740 - $957,662.50).

2. The husband wants to retain the Suburb C property. The remaining adjustment between the parties will be a payment by the husband to the wife or in default, a sale of the Suburb C property and a distribution to the wife from those proceeds. In the latter event, the distribution will be expressed as a percentage of the realised net value of the property. In that way, the parties will share in the loss or benefit of any difference between the net value of the property at the value attributed to it in these proceedings.

3. I will allow the husband two months to refinance the Suburb C property and to pay the wife $822,077.50. For the purposes of these proceedings the Suburb C property has a net value of $2,680,000.

The Suburb C property
B Street, Suburb C Folio Identifier …	$3,100,000
Minus mortgage	-$420,000
$2,680,000

1. If the husband does not pay the wife $822,077.50 within two months of the date of these orders, or such further time as the parties may agree in writing, he will forthwith sell the property and pay the wife an amount equal to $822,077.50 divided by $2,600,000 expressed as a proportion of the net sale proceeds. I will round that proportion down to 31.6 per cent. In order to give the wife a level of certainty, I will provide for the calculation of the net proceeds to assume that the mortgage balance remains at $420,000. In that way the husband gets the benefit of any reduction in the mortgage after the trial and the wife is protected from any increase.

2. The wife has sought an order that the Suburb H property be transferred to her. I understood that it was already in her name. Each of the parties has sought orders about specific items of personalty. Nothing was advanced in final submissions about those matters. Apart from the orders I was asked to make by agreement, I will not make the orders respectively sought.

3. The parties are at liberty to apply to restore the proceedings to the list within 21 days of judgment in respect of the wording, rather than the import, of the orders.

Conclusion under Section 79

1. This was a marriage that spanned 20 years and very significant contributions were made by each of the parties during that period and since. They acquired substantial assets and provided for themselves and their daughters. The parties shared the work of the marriage in different ways but overall the husband’s contributions were greater than those of the wife. An adjustment in favour of the wife is justified by reference to the non-contribution factors in s 79(4). In my view an equal division of the net assets will reflect a just and equitable division of their property.

I certify that the preceding one hundred and thirty five (135) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Loughnan delivered on 4 April 2017.

Associate: 

Date:  4 April 2017